I recently met with one of the female CEOs in whom I’ve invested to encourage her to apply for the MergeLane accelerator. I encouraged her to apply because she is an exceptional entrepreneur who has been making impressive progress with her business. She asked me a great question: “As an investor in our company – a company that has already raised angel capital – why do you think we should join an accelerator?” I wanted to share my thoughts.
Here’s why I, as an investor in her company, think she should apply. I hope my perspective will help other entrepreneurs and angel investors understand why MergeLane might make sense for post-angel raise, and other later entrepreneurs:
Later-stage companies can better execute on accelerator connections: Over the past few years, I’ve been introduced to several accelerator graduate companies in which I was seriously interested in investing. I gave them a soft commitment, and I made some advantageous introductions for them. Because they were early-stage, however, it took them six months or more to get their ducks in a row to be able to take my investment and to follow-up on the connections I had provided. By that point, my interest had waned.
Accelerators accelerate the follow-on fundraising process: Raising angel capital and follow-on venture rounds is time-consuming and distracting, which is especially challenging for later-stage companies. A good accelerator will streamline and accelerate investor connections and greatly reduce the time and effort required to connect with potential VC and follow-on funding connections.
Accelerator mentors are more committed and engaged: Accelerators provide a focused time commitment and coordination that tends to greatly increase the engagement of mentors. Also, and I’ve certainly seen this through my own experience, the positive peer pressure from other mentors and the accelerator encourages mentors to bring their A-game.
94% of what could be is more interesting than 94% of what is: Yes, offering 6% equity to an accelerator program can feel like a big sacrifice. However, as an entrepreneur and investor, I’ve learned many times over that increasing the value of the business can be well worth this sacrifice. If the accelerator will increase the value of the business by at least 6%, then it’s an easy choice. From my experience investing in companies that have gone through exceptional accelerators, it’s been well worth it.
I think MergeLane is a uniquely valuable opportunity for companies with at least one woman in a leadership role: I’ve personally never seen potential to accelerate companies like I see with MergeLane. As an active angel investor and founder of an angel group, I have a robust network of people who want to help startup companies, but I’ve never seen a network response like this. The level of interest and support we’ve seen from our mentors and supporters has far exceeded our expectations. We have hundreds of well-networked and experienced investors, entrepreneurs and generally bright people who want to support our MergeLane companies. My partner Sue Heilbronner and I are well aware that we have to deliver an exceptional program and positive investor returns to make this program a success. We’ve invested our own money and convinced extremely influential business leaders to mentor and invest in MergeLane. We are driven to prove that women-led companies can produce exceptional returns.
To sum up, I think top accelerators – including MergeLane – can materially advance the progress of any company that is wired for success and is facing a crucial milestone in their business. Whether it’s the first seed round, last venture round, expansion of sales or a company re-invention, I think a solid accelerator experience can deliver tremendous value.
I've spent more time than necessary on our fund administration and reporting, in part because of some of the easily avoidable administrative mistakes I’ve made over my 10-year journey as a startup investor.
Over these past two months and throughout all of 2020, I've learned something that I want to record to make sure that I remember: My anxiety about the potential outcomes is almost always worse than the actual outcome.
In this episode, Beezer shares how the pandemic is affecting Sapphire Partners’ investment strategy. I also share what I’ve been seeing from investing in startups and venture capital funds through our MergeLane fund.